11/28/2018 Having a Baby - Time for an Insurance Checkup

BlogHaving a Baby - Time for an Insurance Checkup


The birth of a child is always a wonderful time. There are many things to consider and many more things to buy. Chances are insurance is the last thing on your mind as you get ready to welcome that new bundle of joy. Even so, welcoming a new family member into your household will mean changes to your insurance needs.

Taking some time to review how your insurance needs will change as you expand your family is important. Having a baby will change many things about your insurance coverage needs, from how much life insurance you might need to which health insurance coverage fits you best.

Changing Health Insurance Needs
One of the most important insurance considerations revolves around your health insurance. You will need to contact your health insurance company and let them know the upcoming birth. The agent you speak to should be able to help you better understand your maternity and delivery benefits, as well as coverage for pediatrician visits in the future.

The birth of a child will probably mean many more doctor visits for both mom and baby, so you may need to revisit the type of coverage you have. If you have always chosen a high deductible policy, you may need to rethink that decision and choose a plan with lower deductibles, even if the plan includes higher monthly premiums.

Life Insurance Considerations
Bringing a new child into the world means you now have one more person who depends on you. That can change your life insurance needs substantially since you now have a child who will be relying on your income for at least the next 18 years.

That timeline is important since it can affect the type of life insurance you need. You could, for instance, choose a quality low-cost term life insurance policy with a term of 20 to 25 years. That term would take your new son or daughter through high school and college. If you were to die, the money provided by the life insurance policy could pay for school and get your child off to a good start in life.

The naming of the beneficiary is another important consideration when it comes to protecting your new child. Whether you are buying life insurance for the first time or simply adjusting your coverage, you will need to make sure the beneficiary designation is handled properly.

You may be tempted to name your new son or daughter as a beneficiary on your life insurance policy. After all, the whole purpose of that policy is to protect your loved ones. Keep in mind, however, that many states do not allow minor children to receive proceeds from a life insurance policy, and that could create some complications at a very difficult time.

It is generally better to name your spouse or another responsible adult as the beneficiary of your life insurance policy. You can use your will to spell out exactly how those proceeds are to be distributed and for whose benefit.

Insurance may not be the first thing on your mind as you await the birth of your first child, but it is an important consideration nonetheless. Your insurance needs change throughout your life, and important life events like the birth of a child should always trigger a review of your insurance benefits.